Slide 1: Coty at Earnings
COTY at EARNINGS NOVEMBER 6, 2020 SINCE 1904
Slide 2: Stronger Coty Emerging in Q1
STRONGER COTY EMERGING IN Q1 Q1 results above expectations; market trends and Coty sales improved in all #1 regions and across prestige and mass businesses #2 Strong profit and cash delivery: Fixed Cost program, tight CAPEX and one- off cost control. FY21 profit and FCF remain priority #3 Strong imp
Slide 3: Financial Overview
FINANCIAL OVERVIEW TITLE OF THE PRESENTATION 3
Slide 4: New Coty RemainCo Financial Reporting
NEW COTY REMAINCO FINANCIAL REPORTING • Upon signing the Wella divestiture, US GAAP requires Coty financial reporting of Continuing vs. Discontinued Operations, until completion • US GAAP rules on Wella cost allocations do not reflect some offsetting measures, affecting the reported Coty Continuing
Slide 5: Sales Trends Improving Sequentially
SALES TRENDS IMPROVING SEQUENTIALLY NET REVENUES (CONTINUING OPERATIONS) • Sales trend improvements in all regions, and across prestige and mass businesses • Helped by alignment between sell-in and sell-out 4Q20 LFL 1Q21 LFL Mass Brands -48% Mass Brands -10% Prestige Brands -73% Prestige Brands -25%
Slide 6: Very Solid Profit
VERY SOLID PROFIT PROFIT • Gross margin of 58.6% inline with FY20 average Adjusted Operating Income ($M) $93 • 1Q21 Adj operating income of $81M for $81 TSA Income Continuing Ops or $93M for Ongoing Coty, $65 8.2% inclusive of Wella cost recovery income 7.2% • 24% profit growth YoY despite stranded
Slide 7: $600M Fixed Cost Reductions on Track
$600M FIXED COST REDUCTIONS ON TRACK • In 1Q21, Fixed Costs decreased -17% YoY, accelerating vs. previous quarter • Achieved approx. $80M of savings in Q1 from headcount reduction and significant savings in business services • On track to reduce fixed costs by more than $200M in FY21 and $600M by en
Slide 8: EPS Reflects Improvements Across the Board
EPS REFLECTS IMPROVEMENTS ACROSS THE BOARD $ Millions Adjusted Op. Income • STRONG OPERATING INCOME 81 • $93M Ongoing Coty (Continuing Ops) • $81M Continuing Operations Net Interest (62) Income Tax (7) • WELLA STRONG PERFORMANCE • Net revenues growth of 7% Wella NI / Minority Interest 92 • Gross mar
Slide 9: Better Than Expected Free-Cash Flow
BETTER THAN EXPECTED FREE-CASH FLOW $ Millions Adjusted EBITDA 307 • SOLID FREE CASH FLOW (Total Coty) • Strong OI and EBITDA • Tight management of Capex and One- Capex, WC and one offs (307) off costs • Overdue reduction and working capital Interest and tax (28) under control FREE CASH FLOW (28) •
Slide 10: Substantively Improved Capital Structure Post Wella Closing
SUBSTANTIVELY IMPROVED CAPITAL STRUCTURE POST WELLA CLOSING positive Cash Flow $2.5 Q2 Proceeds from $1.3 $7.86 Wella 60% Wella 40% Bn ~$5.0 financial stake Bn < $4.0 Bn Financial Net Debt Financial Net Debt Economic Net Debt Q1 post closing post closing WELLA CLOSING BY END OF CY20 IMPROVED CAPITAL
Slide 11: Strategic Progress
STRATEGIC PROGRESS TITLE OF THE PRESENTATION 11
Slide 12: Delivering Strong, Consumer-Centric Innovation
(1) DELIVERING STRONG, CONSUMER-CENTRIC INNOVATION PERFECT MARC Gucci double-digit COVERGIRL #1 face Sally Hansen #1 U.S. JACOBS #1 fragrance retail sales growth in launch in U.S. Mass in Mass Cosmetics launch Launch in U.S. and U.K., U.S. and China, driven Spring 20 in Spring 20 calendar year-to-da
Slide 13: Strengthening Positions in Core Markets
(2) STRENGTHENING POSITIONS IN CORE MARKETS PRESTIGE MASS PRESTIGE Coty retail sales Coty cosmetics market Coty gaining share growing double- share now in line with digits in Sep and the market gaining share PRESTIGE MASS PRESTIGE Coty gaining share #1 mass cosmetics brand Coty Prestige retail Rimme
Slide 14: Strong Momentum in E-Commerce
(3) STRONG MOMENTUM IN E-COMMERCE E-com penetration doubles YoY to 13% of revenues ¹; driving accretive margin DTC PRESTIGE CONSUMER BEAUTY Launched Kylie Skin DTC sites in 19% e-com penetration; double Double-to-triple digit growth in e- U.K., Germany, France and YoY commerce sell-out in most marke
Slide 15: Leveraging the Potential of Our Skincare Brands
(4) LEVERAGING THE POTENTIAL OF OUR SKINCARE BRANDS KYLIE SKINCARE SALES TRIPLED YOY CLOSE TO 50% OF KYLIE SKIN DTC ORDERS ARE FROM RETURNING CUSTOMERS >65% OF PHILOSOPHY DTC ORDERS ARE FROM RETURNING CUSTOMERS 4K INCREMENTAL CUSTOMER ACQUISITION THOUGH NEW SMS CRM CURRENTLY DEVELOPING KKW SKINCARE
Slide 16: Expanding Our Presence in China
(5) EXPANDING OUR PRESENCE IN CHINA • Broadening our prestige portfolio across categories ➢ Cosmetics & skincare now ~20% of our China Prestige sales, with over 40% growth YoY • Top Gucci counters monthly sales on par with leading Prestige beauty brands despite smaller cosmetics assortment ➢ First l
Slide 17: A Strong Start to FY21
A STRONG START TO FY21 • Meaningful improvement in topline trends • Lower costs, and further reducing • Solid profit, and cash-flow generation • Improved leverage upon Wella closing • Growing momentum sees glide path to: • Leadership in makeup; Prestige and Mass • A global skincare portfolio with no
Slide 18: Disclaimer
DISCLAIMER Forward-Looking Statements Certain statements in this presentation are forward-looking statements. These forward-looking statements reflect the Company's current views with respect to, among other things, the impact of COVID-19 and potential recovery scenarios, the Company’s comprehensive
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